Housing and Planning Bill

Viscount Hanworth Excerpts

Tuesday 26th January 2016 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, the Housing and Planning Bill is a most ill-conceived piece of legislation. It will do nothing to alleviate the housing crisis. It is certain to exacerbate the crisis and to increase the acute social divisions from which this country is suffering.

One might have expected the civil servants at the Department for Communities and Local Government to do a much better job with a housing Bill, notwithstanding their depleted numbers. However, civil servants no longer have the opportunities they once had to avert political folly—and, of course, this is not where the Bill originated. It originated from think tanks and special advisers affiliated to the Conservative Party. They have ignored the advice of experts in the field. The comments of experts now amount to a damaging critique of the Bill. Indeed, a former Permanent Secretary at the Department for Communities and Local Government, from whom we have heard today, has been among the foremost critics of the Bill.

One of the principal proposals of the Bill, which is to extend the right to buy to the tenants of housing associations, arose at a late stage in the campaign for the general election when the Conservatives felt far from assured of a victory. The proposal, which was to compel the sales of the properties of housing associations, was a reprise of one of Margaret Thatcher’s policies, which was to compel the sale of council houses. Thatcher’s policy seemed, at the time, to be a winning one, and Cameron’s proposal may be regarded as the product of thoughtless desperation. As is the case with so much recent Conservative legislation, an extemporary pronouncement by the Prime Minister has committed others to the task of elaborating a damaging and dysfunctional policy.

In the minds of many in the Conservative Party, as in the mind of Margaret Thatcher, there is an aversion to the provision of council housing on account of its social connotations. This damaging attitude has extended to our system of town and country planning, which is indeed a legacy of the socialist movement. The Housing and Planning Bill inflicts further damage on our national planning system. Significant damage was inflicted in 2012 with the establishment of the new National Planning Policy Framework. A set of sophisticated and carefully crafted documents, which had provided policy guidance in many specific circumstances, and which had been developed and refined over the previous 25 years, was tossed into the rubbish bin, to be replaced by 50 pages of vacuous generalities.

The damage was compounded in subsequent Acts of Parliament, including the Growth and Infrastructure Act 2013, which established the option of bypassing the planning system in favour of applications made directly to the Secretary of State. The present Bill intends to strengthen such provisions. It also proposes to introduce competition in the processing of applications for planning permission in a way that would completely bypass the planning authorities. The destruction of our national system in favour of the administrative fiats of central government is bound to lead to chaos and confusion.

I turn briefly to a critique of some of the measures of the Bill. The original proposal relating to the sale of housing association properties has been buttressed by a policy for the forced sale of council houses in high-value areas and, generally, of homes that have a high market value. This will occur whenever a home becomes vacant, which will preclude its being used to house needy persons or families who have been on council waiting lists. The intention is to use the proceeds of the sales of council houses to pay for the extension of the right to buy to housing association tenants and to finance discounts granted to purchasers of so-called starter homes. The council will be compelled to remit the majority of the proceeds from the sales to central government.

The Bill declares an intention to monitor the progress of such divestments and to penalise a council if, in the judgment of the Secretary of State, the sales are not proceeding at a sufficient rate. The incumbency of council tenants with security of tenure poses a limit to the rate of divestment. This obstacle has led to a clause in the Bill that will compel councils to offer tenancies of only two to five years’ duration to new tenants. Security of housing is a precondition of a stable and a prosperous existence, but such security is to be denied to the least prosperous members of our society. This policy threatens to do massive social damage.

The Bill no longer emphasises the need for affordable housing. Instead, it talks mainly of starter homes. These homes will be available to first-time buyers under the age of 40 at a cost to be limited to £450,000 in Greater London and £250,000 elsewhere. The Bill allows these, nevertheless, to be classified as “affordable” houses. As many critics have remarked, such prices lift the starter houses beyond the reach of the majority of persons of modest incomes and little capital. For those who can afford a starter house, the subsidy that is proposed will be a discount of 20% of the price of a home, which will be a considerable boon. However, there can be no justification for subsidising individual capital gains from the disposal of public assets. The availability of council homes for households in genuine need will be further reduced.

As we have heard, the Bill will lead to significant expenditure from the public purse, through housing benefit, to provide temporary accommodation in the private sector for households who might otherwise have been housed by local authorities. The starter-home initiative will do more to inflate house prices than to increase the supply of accommodation, therefore it will worsen rather than mitigate the current crisis of housing supply and affordability. Indeed, it is remarkable and almost incomprehensible that the Government should have predicated their housing policy on a succession of measures that can serve only to stimulate demand. They have offered few policies that are aimed directly at increasing the supply of housing.